PAG will test the choppy waters of the Hong Kong IPO market with a listing that could raise $2 billion for the private equity firm, according to an HKEX filing and a Bloomberg report published late Friday.
Hong Kong-based PAG on Friday submitted an application for an initial public offering on the local bourse, with the heavily redacted document naming Goldman Sachs and Morgan Stanley as joint sponsors and UBS as financial advisor.
The fund manager led by chairman Weijian Shan could raise at least $2 billion in an IPO valuing PAG at between $10 billion and $15 billion or even as much as $20 billion based on multiples from recent deals, Bloomberg said, citing people with knowledge of the matter.
But the prospective capital raise comes at a fraught moment for the Hong Kong stock exchange, with the benchmark Hang Seng index down roughly 12 percent in the last six months and a wave of cancelled IPOs calling into question the prevailing market conditions.
This month alone has seen several high-profile Hong Kong IPOs by mainland firms put on ice amid market volatility and increased scrutiny of public listings by Chinese officials.
Ride-hailing giant Didi Global called off its planned HKEX listing after the Cyberspace Administration of China informed company executives that their proposals to prevent security and data leaks had fallen short of requirements, Bloomberg reported.
Didi’s New York-listed American depositary shares began trading only last June, with Chinese authorities launching a crackdown on tech firms shortly thereafter and the Beijing-based firm announcing in December that it would delist and seek a Hong Kong IPO.
Also this month, developer Dalian Wanda Group reportedly suspended the Hong Kong IPO of its shopping mall unit amid challenging conditions in China’s real estate sector, with PAG acting as one of the major backers of that planned listing.
Two weeks ago, the long-awaited HKEX listing of Shui On Land’s Xintiandi unit lapsed into inactive status after the developer founded by Hong Kong tycoon Vincent Lo struggled to drum up investor interest. Last August, sources told Bloomberg that Shui On aimed to raise at least $500 million from the separate listing of the ownership vehicle for the group’s mainland commercial properties, including the landmark Xintiandi shopping and entertainment complex in Shanghai.
Bloomberg first reported in January that PAG was considering a Hong Kong IPO. For the investment firm, which has $50 billion in assets under management and 30 active funds, the listing plan comes after it recently secured a $50 million capital commitment from the Employees Retirement System of Texas for its third pan-Asian core-plus/value-add real estate vehicle.
The pledge to PAG Real Estate Partners III was disclosed in a January report from ERS, a pension fund for the US state’s government employees.
PAG’s latest fundraising round coincided with at least one big-ticket real estate buy, as Mingtiandi reported in January that the private equity shop had agreed to acquire Cross Street Exchange near Singapore’s Raffles Place for S$810.8 million ($603 million).
The Hong Kong firm picked up the office and retail complex with the goal of upgrading the ageing property, according to sources familiar with the deal who spoke with Mingtiandi in January.
That same month, PAG announced the appointment of Amandine Wang as chief executive of its Flow Digital Infrastructure venture, as the firm continues to ramp up its incursion into Asia’s spirited data centre race.